Harrah’s New Orleans revenues down again, official blames smoking ban as gamblers flock to riverboat casinos to puff and play _lowres

Advocate staff photo by JOHN McCUSKER -- Revenue at HarrahÕs Casina is down. The casino is blaming it on the cityÕs new smoking ban.

When Louisiana embraced gambling as its economic salvation 30 years ago, some Vieux Carré businesses in New Orleans lobbied for what they called a “Monte Carlo-style” casino.

It was to take over the huge Beaux Arts structure that had most recently housed the state Wildlife and Fisheries Department but now stood empty. It would have been the perfect setting. We New Orleans boulevardiers had visions of ourselves in tuxedos exchanging bons mots over a hand of chemmy with smoke from smuggled Cubans wafting up to the cornice.

It was never going to happen, because such a classy establishment would have been too niche to generate sufficient tax revenues. Government prefers to soak the masses because that is where the money is.

So, the old building reverted to its original role as the state Supreme Court, while suckers in the casinos sat for hours amid rows and rows of slot machines, an infernal din and wreaths of cigarette smoke. Louisiana casinos are truly demotic institutions. Nobody is too poor to lose money here; you can play for penny stakes even at the granddaddy of Louisiana casinos, Harrah's in New Orleans.

It's easy money for the owners, but there is not so much of it sloshing around Harrah's these days. Since New Orleans adopted its smoking ban a couple of years ago, revenues are down by more than $70 million, as customers either quit playing or decamp to the fuggy locales of Jefferson Parish and elsewhere.

Casino owners in Baton Rouge are therefore aghast that the Metro Council seems poised to approve its own smoking ban today. As the Harrah's experience has shown, they will lose customers to parishes where bars and casino patrons are allowed to light up. Thus, if a ban is to be imposed, they might prefer it to be statewide.

The Legislature, however, has so far resisted calls to intervene, evidently clinging to an old-fashioned faith in individual liberty and the free market. But it is only a matter of time, for tobacco is widely regarded as such a threat to public health that the tide against it is inexorable.

Indeed, the minority of council members with reservations about the proposed ban do not argue that citizens should have the right to make their own lifestyle choices, wise or otherwise. Neither do they deny that the minority of people who smoke are poisoning the air in enclosed public places, and putting everyone else at hazard. Principles are not at issue. It is all about money.

Baton Rouge expects to rake in $9.5 million in casino taxes this year, but, once the smoking ban goes into effect, the take is projected to decline by 20 percent. “Where do we make that money up from?” Councilman Buddy Amoroso wonders.

It will be a challenge, no doubt, but, if second-hand smoke is the scourge that it is alleged to be, then government surely has a moral obligation to find an alternative source of revenue. Otherwise, let us figure out how many people should fall sick and die for the sake of a balanced budget.

Some ban fans counter that taxpayers would make up the lost tax revenues by paying less in medical bills for smokers. That is a dubious proposition too; smokers who snuff it young can be a Medicare bargain in the long term. Altogether, the financial arguments are too conjectural for a firm conclusion.

Louisiana never did reap the economic rewards predicted when the Legislature, opting for a loose interpretation of its constitutional obligation to “define and suppress gambling,” let the casinos in. We were promised an economic panacea, and now find ourselves teetering on a “fiscal cliff.”

The poor and the desperate ended up paying a disproportionate share of the taxes. Since Louisiana casino patrons are evidently also more likely to smoke cigarettes than the general population, they may be paying way over their share of government expenses.

Citizens who would have frequented a Monte-Carlo style casino are much better equipped to pay taxes, but most of them wouldn't be seen dead in the joints we have. Casino taxes on those casinos will always tend to the regressive, so, if the smoking ban does cut profits, there will be no need to shed tears.

Email James Gill at jgill@theadvocate.com.